which is not a characteristic of oligopoly

12) Which one of the following quotations best describes the kinked demand curve model of oliogopoly? a) The number of average-sized firms in an industry needed to produce sales equivalent to the four largest firms D) A and B. A small number of sellers. Based on the elasticity of demand and its response to the price change, the demand curveDemand CurveDemand Curve is a graphical representation of the relationship between the prices of goods and demand quantity and is usually inversely proportionate. What happens to oligopolistic firms when a recession occurs? E) None of the above. A)Each firm faces a downward -sloping demand curve. A) "Gas prices in this town always go up and down together." b) potential for mergers and acquisitions The market share of the firms is unequal. 11) Once a cartel determines the profit-maximizing price, b) are few in number c) is always downward sloping c) kinked-demand B) raise the price of their products. The firms comprise an oligopolistic market, making it possible for already-existing smaller businesses to operate in a market dominated by a few. CFA And Chartered Financial Analyst Are Registered Trademarks Owned By CFA Institute. B) raise the price of their products. A characteristic found only in oligopolies is A) break even level of profits. C) the good produced in the market has been deemed a necessity b) OPEC B)Firms set prices. What would have been DTRs debt to equity ratio if the$10 million of stock had not been However, DTR does not intend to build any single family homes. Sometimes there may be many firms but the large share of the industrys productive capacity is accounted for only by a few firms, the others share will be insignificant as far as the market is concerned. The distinguishing characteristics of oligopoly are briefly explained below: 1. b) depends on the firm's cost structure Here we discuss how does Oligopoly market work in economics along with its characteristics. Since there are few dominating firms which are having full knowledge about the market, the decisions on the price and output of a firm depend on the reactions of other firms. The presidents friend constructs and sells single family homes. b) flexible price changes, not production costs, so it can't be b. A single If so, then the firm's demand curve will be ______. When the number of firms in an oligopolistic industry increases from 3 to 10, it is ______ to collude. d) are more efficient because cartels and collusion is always successful D) increase the amount they produce. C) strategies D. Th; Which of the following is a characteristic of an oligopoly market structure? D) Gear cheats, while Trick complies with the agreement. Types of Market Structure Economists group industries into four distinct market structures: 1. b) collusion A cartel is a group of producers of goods or suppliers of services formed through an agreement amongst themselves to regulate the supply of goods or services with the basic intent to illegally regulate the prices or restrict competition regarding the said goods or services. If this game is nonrepeated, the Nash equilibrium is A) both firms cheat on the agreement. B) revenues, elasticity, profit, and payoffs. O D. Some barriers to entry. b) Lower prices, but greater output a) Dominant strategy I really hope you learned this article. *The game would eventually end in either cell B or cell C. B) the firms may legally form a cartel. Which helps an oligopoly to form within a market? Raised barriers to entry, price-making power, non-price competition, the interdependence of firms, and product differentiation are alloligopoly characteristics. A) Each firm faces a downward-sloping demand curve. E) downward-sloping demand curve with no kink. *Patents, Which are reasons that that firms merge? A) This game has no dominant strategies. Without collusion, if a firm incorrectly assumes that its rivals will charge the same price but its rivals actually charge a lower price, the firm's demand curve will shift to the ____. e) It could be downward sloping or kinked. a) Import competition *Reduce uncertainty 18) A market with a single firm but no barriers to entry is known as Pure (Perfect) Competition. E) 10,000. c) inflexible Advertising can persuade consumers to pay higher prices for products that are well _____ (one word) instead of purchasing unadvertised products with lower prices. Oligopoly refers to a market situation or a type of market organisational in which a few firms control the supply of a commodity. What is oligopoly and its characteristics? d) through advertising, Firms have a desire to cheat on a collusive agreement because ______. *Prohibit the entry of new rivals. c) dominant firms b) competitively *Ownership and control of raw materials It is an essential component of marketing strategy leading to brand recognition and business growth. always one step ahead. C) the firms keep profits and prices so low that no rivals are . Firm A and Firm B are the only producers of soap powder. As a result, monopolists produce less, at a higher average cost, and charge a higher price than would a combination of firms in a perfectly competitive industry. 1) A cartel is a group of firms which agree to *Ownership and control of raw materials a. C)The sales of one firm will not have a significant effect on other firms. Marginal revenue = Change in total revenue/Change in quantity sold. These data are as follows: 30.334.531.130.933.731.933.131.130.032.734.430.134.631.632.432.831.030.230.232.831.130.733.134.431.032.230.932.134.230.730.730.730.630.233.436.830.231.530.135.730.530.630.231.430.730.637.930.334.130.4\begin{array}{lllll}30.3 & 34.5 & 31.1 & 30.9 & 33.7 \\ 31.9 & 33.1 & 31.1 & 30.0 & 32.7 \\ 34.4 & 30.1 & 34.6 & 31.6 & 32.4 \\ 32.8 & 31.0 & 30.2 & 30.2 & 32.8 \\ 31.1 & 30.7 & 33.1 & 34.4 & 31.0 \\ 32.2 & 30.9 & 32.1 & 34.2 & 30.7 \\ 30.7 & 30.7 & 30.6 & 30.2 & 33.4 \\ 36.8 & 30.2 & 31.5 & 30.1 & 35.7 \\ 30.5 & 30.6 & 30.2 & 31.4 & 30.7 \\ 30.6 & 37.9 & 30.3 & 34.1 & 30.4\end{array} D) increase the amount they produce. It is an essential component of marketing strategy leading to brand recognition and business growth. Artificial intelligence (AI) services are on the rise, with every industry readying to integrate the technology sooner or later. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. *interindustry competition The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. a) Firms have no control over their price. B) both can earn an economic profit in the long run. believes that DTRs debt to equity ratio of 1.6 is probably the minimum that lenders will accept. In second-degree price discrimination the monopolist offers a menu of quantity-based pricing options designed to induce customers to self-select based on how highly they value the product. a) greater than or equal to 40% OA. oligopoly, monopoly, monopolistic competition, pure competition pure competition, monopolistic competition, oligopoly, monopoly. a) its rivals do not respond to either a price cut or price increase B) assumes marginal cost is constant. D) Bob denies and Art confesses. d) their profits and sales will rise On the other hand, if an oligopolist reduces output by raising prices, the rest refrain from doing so. characterized by the presence of a few large firms who produces 30.331.934.432.831.132.230.736.830.530.634.533.130.131.030.730.930.730.230.637.931.131.134.630.233.132.130.631.530.230.330.930.031.630.234.434.230.230.131.434.133.732.732.432.831.030.733.435.730.730.4. 5) A market with a dominant firm and with weak barriers to entry ________ in long-run equilibrium because ________. a) their prices will be unchanged d) Firms choose strategies at the same time. E) more elastic than the demand just above the price at the kink. They collude and agree to share the market equally. Based on the figure, if one firm cheats on the collusive agreement it can increase its payoff by Oligopolistic firms do which of the following when they change their pricing strategies? a) There are a few large firms that make up the industry. Characteristics: There are few firms in the market serving many consumers. price rigidity Element of monopoly. You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. b) There are barriers to entry into the market. b) Firms may sell a homogeneous product. 16) A monopolistically competitive firm is like an oligopolistic firm insofar as A) both face perfectly elastic demand. c) allocative efficiency but not productive efficiency Which of the following is not a characteristic of an oligopoly? The existence of oligopoly requires that a few firms are able to gain significant market power, preventing other, smaller competitors from entering the market. 36) Refer to Table 15.3.10. Also, they rely on free-market forces to earn higher profits than a competitive market. d) Oligopolistic collusion, Compared to monopolies, oligopolies ______. d) through advertising 13) A tit-for-tat strategy can be used Demand and cost differences, the number of firms in the industry, and the potential for cheating all represent _____ (one word) to collusion. Lets identify the oligarchy before identifying the characteristics of an oligopoly. c) Localized markets Even though the products of companies A and B are similar, there must be something that distinguishes them. c) An outcome in the payoff matrix from which neither firm wants to deviate since the current strategy is optimal given the rival's strategic choice. Is Microsoft an oligopoly Do you want to know Click Here. This market structure can be competitive and sometimes less competitive. E) marginal revenue curve is upward sloping. 8 8 which is not a characteristic of oligopoly a each - Course Hero As a result, each firm obligates to adhere to pre-determined price and quantity/output levels to maximize revenue. E)Firms are profit -maximizers. View full document. Oligopoly theory | Industrial economics | Cambridge University Press C) Trick cheats, while Gear complies with the agreement. 0. a) gentleman's agreement d) They do not achieve allocative efficiency because their price exceeds marginal cost. d) Its marginal revenue curve would consist of two segments Features: Many and small sellers, so that no one can affect the market A market is considered to be a(n) ______ when the largest four firms in an industry control more than 40% or more of the market. Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. However, firm B follows the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. 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E) a competitive market produces two goods. *To increase control over the product's price D) a prisoner has no incentive to confess to his crime, and stands a greater chance of not going to prison. D) the industry is government regulated Pure because the only source of market power is lack of competition. E) None of the above. *price elasticity of demand Consequently, the output and pricing policies of a particular company can affect market conditions. a) price leadership (Enter one word per blank. And that is what turns out to be the unique selling proposition (USP) of the respective brands in the oligopolistic industry. In an oligopoly, dominant market players are influential enough to decide on the price of products and services. c) game theory a) Demand is highly elastic below the going price Which of the five do you feel is the most important? d) achieve greater allocative efficiency but lesser productive efficiency, c) give the appearance of increased competition The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. e) may be no more efficient due to a lack of firm interdependence, c) may be less desirable because they are not regulated by government to protect consumers. 2. Increasing returns to scale is a term that describes an industry in which the rate of increase in output is higher than the rate of increase in inputs. A firm in an oligopolistic market ______. Instead, they try different approaches, such as rewarding customers for their loyalty, differentiating their product offerings, providing sales promotion schemes, acting as sponsors, etc. B) both prisoners deny. It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. The more concentrated a market is, the more likely it is to be oligopolistic. c) Firms' advertising decisions are interdependent. Chapter 15: Oligopoly Flashcards | Quizlet d) independently, The shape of the demand curve for an oligopolistic firm ______. a) kinked and steep Oligopoly - Economics Help That is, the large firm acts independently. Monopolistic Competition and Economic Efficiency, Monopolistic Competition Equilibrium| Long-run, Short-run, What is Inflation Mean | Definitions, Types, Causes, How to Calculate the GDP [Definition & Formula], Main Theories of Inflation (With Diagram), Indifference Curve Q&A [Download Indifference Curve Pdf]. *It eliminates competition among firms. read more rather than lower prices to gain profits and market share. d) The market contains a few large producers. Their differences can range from. The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above. D) There is more than one firm in the industry. b) legal b) neither productive efficiency nor allocative efficiency What is the Nash equilibrium? Meanwhile, all firms know that their decisions affect other firms sales and profit, hence they necessarily react against those decisions. The policy implementation process has not taken in to account the life of rural peasants living in vicinity of cities. a) Its demand curve is downward-sloping A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating. as the price increases, demand decreases keeping all other things equal. 6) According to the kinked demand curve theory of oligopoly, at the quantity corresponding to the kink, the firm's d) cheat, Which of the following represent shortcomings of the four-firm concentration ratio? corporations president in exchange for some land just before the negotiations with lenders began. Marginal costMarginal CostMarginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. E) a cartel. c) price leadership We unlock the potential of millions of people worldwide. The amount of time (in seconds) needed to complete a critical task on an assembly line was measured for a sample of 50 assemblies. A) Each firm has an incentive to collude. C) is; to cheat regardless of the other firm's choice 4) According to the kinked demand curve theory of oligopoly, each firm thinks that demand just below the price at the kink is A) less elastic than the demand just above the price at the kink. D) neither is protected by high barriers to entry. Any change in either of them will affect the quantity/output sold by a producer. The first firm to move in a sequential game has an advantage by establishing a ____ _____ that is favorable to them. A) zero economic profits in the long-run. A. c) kinked A) each firm can act like a monopoly. b) collusion model E) Bud and Miller each have a dominant strategy. D) a firm in perfect competition. When there are two market leaders in any industry or service, this is referred to as a duopoly. Oligopoly is said to prevail when there are few firms or sellers in the market producing or selling a product. B) a market where two firms compete for profit and market share. The land is in an area zoned only for You are free to use this image on your website, templates, etc., Please provide us with an attribution link. Your email address will not be published. B) predict that an increase in price by one firm is accompanied by price increases of other firms if every firm experiences a large enough increase in marginal cost. Which of the following represents the problem with the four-firm concentration ratio? But in practice, there are several barriers to entre which make it quite difficult for the new firms to join the industry or market. 8) Which of the following quotes shows a contestable market in the widget industry? A) in a single-play game or a repeated game.

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